USDNOK Heading Lower
The short trade idea in USDNOK this week has already played out (8.4140 target hit) with the ongoing rally in oil prices driving NOK firmly higher. With the energy crisis showing no signs of abating, the outlook for NOK remains skewed firmly higher in the near term. Additionally, some data disappointment in USD this week (PPI miss) has seen the greenback losing some demand. Looking at the retail community position, which is around 80% long, there is plenty of room for this move to develop further.
For now, USDNOK is continuing lower within the bearish channel, putting the focus on 8.2520 as the next target. Both MACD and RSI remain firmly bearish here, keeping the downside outlook intact. The broken 8.5260 region should now act as strong resistance if retested, so the outlook remains bearish while price holds below this region.